The Federal Trade Commission has currently locked its horns with Microsoft in a legal kerfuffle over its plans to acquire one of the world’s leading gaming companies in Activision Blizzard for $69 billion.
Amidst this industry-changing tug-of-war, Canada has announced its disapproval of the proposed merger, challenging the claim by Microsoft that all global regulators, except the FTC and the UK’s Competition and Markets Authority, are on board with the deal, as reported by The Verge’s Tom Warren.
The Canada Competition Bureau recently voiced its concerns, calling out “factual inaccuracies” in the assertion made by the multi-trillion-dollar tech giant. The CCB’s lawyer, Jonathan Bitran, argued that the Bureau had already raised its unease back in May. Although it hasn’t taken the dispute to the level of the UK and the USA, this new objection represents another setback for Microsoft and Activision, likely ruffling feathers at both firms.
Canada's Competition Bureau has just intervened in the FTC v. Microsoft case to correct “factual inaccuracies." It says it told Microsoft last month that the deal was "likely to result in a substantial prevention and / or lessening of competition" https://t.co/aPQgk9JU8L pic.twitter.com/EViA9RsWoh
— Tom Warren (@tomwarren) June 29, 2023
Similar to its counterparts, the CCB sees this as a likely trigger for “substantial prevention and/or lessening of competition with respect to gaming consoles and multigame subscription services.”
Microsoft’s attempted takeover of Activision-Blizzard has been marred by one roadblock after another, notably opposition from global regulatory authorities and competitors. The regulatory bodies in the UK, EU, and USA have been conducting individual investigations, with the EU giving conditional approval, the CMA blocking the deal, and the FTC’s decision still pending.
While Canada’s verdict may not be favorable for Microsoft, several countries, including China, Brazil, Saudi Arabia, Japan, South Africa, and Serbia, have already greenlit the deal, bolstering Microsoft’s stance. Yet Sony remains steadfast in its attempt to block the transaction, with PlayStation’s Jim Ryan labeling Xbox Game Pass as destructive and unpopular with game publishers during his FTC testimony.
The heart of the contention lies in the exclusivity of Call of Duty, which is Sony’s main worry. Despite Microsoft’s assurance to keep Call of Duty on PlayStation for 10 years, Sony remains unconvinced, especially after court documents revealed the previous plans by Microsoft to outspend Sony and corner the market.
Microsoft has since responded to Canada’s objections, as well asserting that the window for the regulator to block the deal has already closed. “We continue to work with regulators around the world to address any remaining concerns,” said Rebecca Dougherty, Microsoft’s spokesperson.
This disquieting development reveals the complexity of this massive acquisition attempt. As regulators worldwide scrutinize the potential effects of this merger, the gaming industry is holding its breath, waiting to see how this tug-of-war will end.
